Motor insurance set to pick pace: ICICI Lombard

With slew of new car models being launched and the festival season round the corner, the automobile sector is expected to pick up pace in the coming months and with that the motor insurance numbers would also go up.
Sanjay Datta, Chief-Underwriting, Claims and Reinsurance, told, “Sale of New vehicles has picked up since late June’20 and the July’20 numbers were encouraging. During the national lockdown, the motor claim intimations were significantly down. Currently, the intimation numbers are almost close to the pre-lockdown levels.”
According to data released by the General Insurance Council, health insurance overtook the motor insurance business for the first time to emerge as the largest portfolio in the general insurance industry in the first two months of this fiscal.
Share of motor insurance shrank to 26% during April-May as against 37% in the year-ago period. The lockdown-induced slide in car sales during this period has impacted fresh premium inflows in the motor segment.
As for ICICI Lombard, the contribution of the motor line of business was 44.34% and 50.99%, respectively for FY19 and FY20 in terms of gross direct premium income (GDPI).
“Motor renewals suffered to some extent during the lockdown phase. However, with digital and telesales platforms the company could garner good renewal numbers which were better than the industry averages,” Datta said.
IRDAI in June asked all general insurers to withdraw from August long-term packages offering both third-party liability (TP) and own-damage (OD) motor insurance policies.
Sharing his views on this IRDAI mandate, Datta said, “Scrapping of long-term package products (for private cars and two-wheelers) were basically done to reduce the insurance premium ticket size for the customer.”
With the scrapping of a package policy, an awareness drive is also necessary to keep the customers informed about the OD part of the cover which would end from the second year of the policy and the customer has to be mindful to purchase the yearly OD cover separately, he added.